- 3 min read
- Updated 2 years ago
As told by Ben Leonard to Daphne Toprek
First things first, why should we be excited about new regulation in financial services?
Regulation exists to improve customer outcomes. Whilst in some cases it can hamper the ability or organisations to move quickly, we have some good examples now of regulations which actually accelerate progress. These include Consumer Duty, as well as the potential for Targeted Support. Together, these present an opportunity for firms to do more to help their customers, whilst simultaneously building a more efficient and profitable business.
Is it easy for firms to adapt to these new regulations?
To adapt requires a combination of technology and process, most notably in the way that data about customers is captured, stored and used to drive customer outcomes.
Technology is in some ways the easy bit, as capabilities exist today. However, more work is needed to join systems together and identify what they need to do.
Process, or culture, is more of a challenge. Firms need to find new ways of working which put the customer at the heart of the operational model, using data and optimising customer journeys on a continuous basis.
Life Moments is not quite in the business of regulation technology. So how does Life Moments still support firms with new regulation?
We build all our products to support customer outcomes, so in that sense they are fully aligned with these new regulations in mind. Our ambition however, is to help firms embed these regulatory initiatives into their commercial propositions rather than view them as compliance.
By way of an example, Customer Understanding is a requirement for Consumer Duty. Firms will need to provide evidence that they are helping consumers to understand key aspects of products they are buying and their suitability for their desired outcome. This could be done by sending a PDF document out at the time of purchase, commonplace today, or embedding educational information into the customer journey ahead of a customer purchase. The latter offers an opportunity to monitor understanding, and in turn adjust how and when further information is shared to ensure full compliance and a better customer outcome.
Besides support on new regulation, can Life Moments also help firms to be ahead of the game?
Consumer expectations are rising and Financial Services firms need to prove their value in order to drive up interest and engagement in their services. As well as making financial services easy to use, research suggests customers want help realising their life goals and managing other life moments. This help needs to be delivered in a modern way (multi-format, jargon free, bite size) and be personalised to the individual. Life Moments is able to accelerate how firms achieve this.
Which bit of (future) regulation do you expect to be most disrupting to how the industry conducts business?
Consumer Duty sets the foundations for a more customer centric way of doing business. This is transformational, but will likely evolve rather than disrupt the way in which the industry conducts business. Targeted Support conversely has the potential to significantly change what customers expect from firms in a short space of time. Those who embrace this stand to disrupt the market.In our view this is a positive disruption. We hope this is a catalyst for the industry to work proactively to fill the advice gap in society, which prevents millions of people from making the most of their money.
How would you advise the industry to prepare for this ?
Through experimentation and the creation of a feedback loop which enables customer focused teams to better understand, segment and personalise customer journeys. The commercial opportunity for firms rests on their ability to service customers better. In turn, this requires a greater understanding of customer intentions and their approach to money. We established Life Moments to help the industry achieve this.